DOJ and SEC unveil charges in $1.9 billion cryptocurrency fraud scheme

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The U.S. Department of Justice in Washington, D.C., June 20, 2023.

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The Department of Justice on Monday announced criminal charges against two people and the guilty plea of a third person for orchestrating a $1.9 billion cryptocurrency fraud scheme known as HyperFund, among other names.

The Securities and Exchange Commission in a related civil action charged two of those individuals for their involvement in the alleged crypto pyramid scheme.

The three defendants charged by the DOJ falsely claimed that investors in HyperFund would receive “substantial returns paid from cryptocurrency mining operations, which did not in fact exist,” said acting Assistant Attorney General Nicole Argentieri of the DOJ’s Criminal Division.

Erek Barron, the U.S. Attorney for Maryland, said, “The level of alleged fraud here is staggering.”

Charged in the criminal case were Sam Lee, an Australian citizen who lives in Dubai, United Arab Emirates, who is accused of co-founding Hyperfund, as well as two HyperFund promoters, Rodney Burton of Miami, and Brenda Chunga of Severna Park, Maryland.

Lee, 35, is charged with a single count of conspiracy to commit securities fraud and wire fraud. Burton, 54, is charged with one count of conspiracy to operate an unlicensed money-transmitting business and another count of operating an unlicensed money-transmitting business.

Both men face a maximum possible sentence of five years in prison if convicted.

Chunga pled guilty Monday to one count of conspiracy to commit securities fraud and wire fraud, for which she faces the same possible maximum sentence.

HyperFund also was known as HyperTech, HyperCapital, HyperVerse and HyperNation.

The DOJ alleges that from June 2020 through November 2022, Lee and his co-conspirators sold investment contracts online through HyperFund’s platform and claimed that investors would earn returns of between .5% and 1% each day until their original investment was either doubled or tripled.

The US Securities and Exchange Commission (SEC) headquarters in Washington, DC, US, on Wednesday, Jan. 10, 2024. 

Graeme Sloane | Bloomberg | Getty Images

This is breaking news. Please check back for updates.

Sumber: www.cnbc.com

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